Antimicrobial peptides (AMPs) are effector molecules of the innate immune system. A variety of AMPs have been isolated from species of all kingdoms and are classified based on their structure and amino acid motifs. AMPs have a broad antimicrobial spectrum and lyse microbial cells by interaction with biomembranes. Besides their direct antimicrobial function, they have multiple roles as mediators of inflammation with impact on epithelial and inflammatory cells influencing diverse processes such as cell proliferation, immune induction, wound healing, cytokine release, chemotaxis and protease-antiprotease balance. AMPs qualify as prototypes of innovative drugs that may be used as antimicrobials, anti-lipopolysaccharide drugs or modifiers of inflammation. Several strategies have been followed to identify lead candidates for drug development, to modify the peptides' structures, and to produce sufficient amounts for pre-clinical and clinical studies. This review summarises the current knowledge about the basic and applied biology of AMPs.